"The reports that we were spying in the United States or used an agent at the Pentagon are baseless," Yuval Steinitz, chairman of the defence and foreign affairs committee of the Israeli parliament and its sub-committee supervising the intelligence services, told the military radio station.

CBS News quoted Friday US Federal Bureau of Investigation officials as saying they believe they have solid evidence that the suspected mole supplied Israel with classified materials relating to US policy on Iran.

Other senior Israeli officials quoted by public radio said Israel had not conducted intelligence gathering activities on US soil for years.

"This case is very bizarre and we don't know what it's about," one official said.

The radio added that the defence ministry "had carried out checks with the services and concluded that Israel is not involved in the least espionage activity in the United States.

CBS quoted sources as saying the suspected spy, described as a trusted analyst at the Pentagon, last year turned over a presidential directive on US policy toward Iran while it was "in the draft phase when US policy-makers were still debating the policy."

This put the Israelis, according to one source, "inside the decision-making loop" so they could "try to influence the outcome."

The analyst is also said to have close links with Pentagon hawks Paul Wolfowitz and Douglas Feith, who are concerned with policy on Iraq.

Wolfowitz is deputy defence secretary and Feith is undersecretary of defense for policy.

Authorities have requested information about the two employees of the American-Israeli Public Affairs Committee (AIPAC) -- a powerful pro-Israeli lobby in Washington -- supposeduly implicated in the case, CBS reported.

AIPAC told CBS News it is cooperating with the government and has hired outside counsel.

It later issued a statement saying: "Any allegation of criminal conduct by AIPAC or our employees is false and baseless. Neither AIPAC nor any of its employees has violated any laws or rules, nor has AIPAC or its employees ever received information they believed was secret or classified."

A spokesman for the Israeli embassy in Washington, Dan Siegel, told the network the allegations "are completely false and outrageous."

Israel pledged not to spy on the United States after the case of Jonathan Pollard, an intelligence analysts for the US Navy, who passed on thousands of secret documents in 18 months before his arrest in Novembre 1985.

Pollard was sentenced to life imprisonment in 1987, but Israel only admitted that he was one of its spies 11 years later. It has since lobbied Washington to grant him a pardon.